Toronto Real Estate Board reports:
March resale housing results show year-over-year sales down 7% and median price down 2.5%.
In March 2009, Greater Toronto Realtors reported 6,171 sales – down seven per cent from March 2008, representing the smallest year-over-year decline in the last five months. The average price for March transactions was $362,052 – down less than five per cent from the same month last year.
“The Greater Toronto housing market has stood up very well given the challenging economic times the world has experienced in recent months,” commented TREB President Maureen O’Neill. “In fact, over the past two months, the situation in the housing market has improved.”
“Sales in March increased at a rate over and above what would be expected from the normal spring-time bump,” said Jason Mercer TREB’s Senior Manager of Market Analysis. “A greater number of households have taken advantage of increased affordability in the housing marketplace.”
The seasonally-adjusted annual rate of sales increased to 65,600 in March – up 36 per cent from the ten-year low reached in January. Seasonally adjusting TREB MLS data removes recurring seasonal trends observed each year. For example, MLS sales are highest in late spring each year and lowest in the winter months. Removing the recurring seasonality, allows for the analysis of a meaningful trend reflecting actual changes in market conditions. By multiplying the monthly seasonally-adjusted figure by 12, creating an annual rate, we can compare how the current month relates to historical annual figures.
Median Price
The median price in March was $317,500 from the $326,000 recorded in March of 2008.
See the complete Toronto Market Watch report »
Looking to buy? Sell? Blogs can help
Article from today’s Globle and Mail by Rob Carrick
There’s disturbing news for people trying to sell homes in a Canadian real estate market where buyers may be getting the upper hand. A nascent trend in the U.S. market has buyers not only tromping and gawking their way through homes for sale, but also sleeping over or at least hanging out for extended periods to get the feel of the place. One shudders to think of the next concession that sellers will make to buyers. Whatever it is, the place to find out about it is on a growing number of real estate and housing blogs.
Blogs, on the off chance you haven’t heard, are an online platform where people with an interest in a topic post their musings on a regular basis. Financial topics are big in the blogosphere and, as money matters go, there’s nothing bigger for most people than buying and selling a home.
Most housing blogs are written by people in the industry, such as agents or mortgage brokers, which makes sense because real estate matters are not a day-to-day concern for most individuals. One issue that does come up repeatedly is mortgages, which happens to be the subject of one of the most essential blogs in the real estate area.
It’s called Canadian Mortgage Trends and it’s produced by mortgage planners Melanie and Robert McLister. In a clear, to-the-point manner, this site dissects the latest interest rate tends, new developments at banks and other lenders and anything else of relevance.
If you’re trying to make sense of the federal government’s move to eliminate 40-year and zero-down payment mortgages for home buyers requiring federally-backed mortgage insurance, this website is a great resource. A recent posting showed how it may still be possible to buy a house without a down payment even after the new rules take effect Oct. 15.
A good blog generates lots of comments from readers, and Canadian Mortgage Trends excels here. Many readers are mortgage professionals, so their comments may seem somewhat technical. But there’s great material here for people who are willing to do some research to find the right mortgage.
Another blog, Real Estate Intelligence, is focused to a large extent on the Toronto market, but it’s also a place to look for nuggets of information on the broader housing market. In fact, this is where I learned about people sleeping over at homes they were thinking of buying. If you’re thinking of exploiting the plunge in the U.S. market to buy a house in Florida, check out the July 13 posting titled “Take my house - please.”
Real estate blogs covering the market in a particular city are pretty common and you can find them by doing a Google search along the lines of “real estate blog Saskatoon.” No snickering - that’s a hot market they have there.
You’ll find if you do one of these searches that lots of real estate agents and mortgage brokers are using blogs to pull in clients. Most of these blogs can be skipped. If they’re not spreading the message that everything’s A-OK in the housing market, they’re reprinting articles published already in newspapers and on other websites.
One exception is a blog that covers the Vancouver market, which has the honour of being the country’s most expensive. YatterMatters, maintained by real estate agent Larry Yatkowsky, has a candid tone that adds credibility to his take on the local market. Right now, Mr. Yatkowsky sees things slowing down, despite what the real estate industry might say (see his recent posts for more details).
For outright skepticism about the housing market, try the blog written by Liberal MP Garth Turner. Mr. Turner recently wrote a book called Greater Fool, which argues that a real estate mania has affected not only the U.S. market, but parts of Canada as well. As a way of promoting his work, Mr. Turner has set up a Greater Fool blog that catalogues all signs of trouble in the housing market. A good blog is an opinionated one, and Mr. Turner delivers. Check out his July 16 posting for a vintage performance.
If you want to know what happens when a real estate bubble pops, check out The Housing Bubble, a U.S. blog that blends housing factoids and quotes into a commentary on a housing market in crisis. Read closely and you’ll find references to the odd Canadian city here.
Most real estate blogs focus on the buying and selling of homes, and not the many financial issues that are raised when you already own a home. For that kind of commentary, try a good general purpose personal finance blog like Canadian Capitalist, Million Dollar Journey or Quest for Four Pillars. Many of these blogs have subject indexes or archives that you can use to jump right to posts on mortgages or housing.
- Real Estate Intelligence
- YatterMatters
- Canadian Capitalist
- Million Dollar Journey
- Quest for Four Pillars
- Greater Fool
Toronto’s sizzlers and fizzlers
Toronto real estate has been on a roller coaster ride over the past 40 years, with soaring highs, gut-wrenching lows, strange twists and heart-stopping turns. As an investment, you could always count on upscale areas like Rosedale, Forest Hill and the Bridle Path to produce good long-term returns.
But if you put your money in the Beach or Riverdale in the last 20 years – or in more recent hot spots like South Riverdale and East York – growth has been spectacular. And, while new development has boosted prices in outlying regions such as Milton, King and north Pickering, other areas in north Toronto and parts of Markham are flatlining.
Surprisingly, 40 areas across the GTA have not even kept pace with inflation since house prices hit their 1989 peak.
Maps published by the Toronto Star show how average house prices have evolved over the last 40, 20 and 10 years.
See the maps and data - which includes the outer regions of the GTA, reflecting the increasing coverage of the Toronto Real Estate Board, which tracks resale housing sales for the Greater Toronto Area.
Home Staging Basics
1. CURB APPEAL - Paint the door and window trim - Mow the lawn, prune the hedges, and buy gorgeous potted flowers in nice containers to place at the entrance - Replace old door hardware, knockers and welcome mats - Wash the windows, brickwork, railings, driveway and sidewalk
2. DECLUTTER - Create space by clearing kitchen and bathroom countertops of appliances, beauty products and knick-knacks - Store excess furniture off-site - Closets should be immaculate and organized - Personal photos should be packed away or relegated to one small area
3. FIXER UP - Missing tiles, broken light fixtures and wonky door hinges should be dealt with - Regrout the bathroom - Hire a handyman if need be
4. IT’S IN THE DETAILS - Purchase new light fixtures, cabinet handles and faucets for an inexpensive kitchen or bathroom facelift - Replace dingy bed linens, threadbare towels and dated window coverings with clean and classic upgrades - Fresh flowers, attractive lighting, and even a little soft background music can help create an appealing environment - Brighten rooms with a fresh coat of paint. Stick to a fairly neutral palette. Include all trim and doors.
5. BE A CLEAN FREAK - Sounds obvious but the house should be spotless - Appliances and countertops should gleam - Don’t neglect walls, ceilings and blinds. All should be dust-and cobweb-free - Hire a professional if you want to avoid the grunt work.
Toronto market activity down 18% in June
The trend toward more balanced market conditions continued in June with 8,600 properties changing hands, Toronto Real Estate Board President Maureen O’Neill announced today.
It is important to note that in this release you will also find market numbers specific to the resale housing activity in 2006 and 2007. This comparison is provided to help present a more accurate perspective of the resale housing market of 2008.
At $395,866, the Greater Toronto Area average price for last month increased by four per cent compared to June 2007 when it was $381,963. The City of Toronto’s average price of $433,082 last month increased three per cent from $421,139 in June 2007. In the 905 Region, last month’s average was $370,559, an increase of four per cent, from $355,240 in June 2007.
In the first two quarters of 2008, the average GTA price increased four per cent to $390,054 from $373,719 during the same time period in 2007, and up 9 per cent from the $356,977 recorded in the same period in 2006.
In the City of Toronto, the average price in 2008 increased four per cent to $427,198 from $411,530 in 2007, and up 10 per cent from $389,313 during the same period in 2006. In the 905 Region the increase was five per cent to $365,536 from $347,852 a year ago, up 9 per cent from $334,220 in 2006.
“Although June 2008 sales in the Greater Toronto Area (GTA) have declined 18 per cent to 8,600 from the June 2007 total of 10,451, June 2007 was the best performance ever for that month,” said Ms. O’Neill.
“This year we’re seeing a return to calmer conditions but the market remains healthy. When compared to the 8,730 transactions in June 2006, GTA sales activity in June 2008 decreased by only one per cent.” Record month June 2007 saw a 20 per cent increase over June 2006.
In the City of Toronto there were 3,481 transactions last month, a decline of 18 per cent from June 2007 with 4,238 sales but down 4 per cent over the 3,641 transactions in June 2006. When you compare record month June 2007 with June 2006, a period before the Toronto Land Transfer Tax went into effect, sales increased 16 per cent.
The 905 Region experienced an equivalent decline of 18 per cent, with 5,119 sales last month compared to 6,213 transactions in June 2007 but a one per cent increase over the 5089 properties sold in June 2006. When you compare record month June 2007 with June 2006, sales in the 905 Region increased by 22 per cent.
In the first two quarters of 2008, GTA sales declined 14 per cent to 43,685 transactions from 50,648 during the same time a year ago and down five per cent from the 45,797 recorded in the same period in 2006. When you compare the first two quarters of 2007 with the same period in 2006, GTA sales increased by 11 per cent.
In the City of Toronto, sales for the first two quarters declined 15 per cent to 17,370 from 20,574 in 2007 and down 8 per cent from 18,917 in 2006. In the 905 Region sales declined 12 per cent to 26,315 from 30,074 in 2007 and down 2 per cent from 26,880 in 2006. However, when you compare the first two quarters of 2007 with the same period in 2006, sales increased by 9 per cent in the City of Toronto and by 12 per cent in the 905 Region.
“The increase in listings we have seen in recent months has resulted in a slightly longer period during which homes are on the market, from 29 days a year ago to 34 days currently,” said Ms. O’Neill. “This has given buyers and sellers a little more time to make well-considered decisions.”
In certain pockets however, the pace of sales remained brisk this June.
Brooklin (E19) experienced a 35 per cent increase in overall sales based on strong detached home transactions.
Burlington (W25) saw a 65 per cent increase in activity, driven by detached home transactions and even more robust attached/row house sales.
In Downtown East (C08), activity was up four per cent due to attached/row house and condominium apartment sales.
“We expect to see balanced market conditions continue in the coming months,” said Ms. O’Neill. “When you look at it from a long-term perspective real estate invariably provides stable returns.”
See full Toronto Market Watch report »
Personal information now manditory
Realtors required to confirm the buyer’s ID.
Canadian realtors are bracing for a customer backlash starting today, as they become new foot soldiers in the battle against money-laundering. Federal regulations that kick in today will force realtors to start asking property sellers and buyers personal information never before required.
In Ontario alone, 47,000 realtors will be expected to fall in line or face stiff penalties. “We know there is going to be consumer rejection on this and we are just following the law,” said Gerry Weir, a London realtor and president of the Ontario Real Estate Association (OREA).
Realtors will be required to ask for the name, address, date of birth and occupation of property buyers and sellers, plus ID such as a driver’s licence or passport.
Weir said Ottawa has made little effort to educate people about the changes, and realtors feel they’re being forced into an uncomfortable enforcement role. He said realtors will have to keep the information for seven years and submit it on request to the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC), a federal agency set up to track suspicious transactions that could be related to money-laundering or terrorism.
If the buyer is foreign or from another part of Canada, the real estate broker will be required to hire an agent in the buyer’s community who can confirm the buyer’s ID.
If a client refuses to disclose the information, Weir said, a realtor would have to walk away from the deal or report the person to FINTRAC.
“Even if I have known you for 30 years, I still have to ask for that information,” he said.
Weir said it could get even worse.
He said Ottawa also wanted to require a receipt-of-funds record, with information on anyone who actually supplied money for sales, including relatives or friends.
Weir said the government backed down on that, but he expects it will only be temporary.
“That is the next step; that will happen,” he said.
FINTRAC officials appear confused about the new rules.
Spokesperson Peter Lamey at first said one piece of ID was needed from buyers and sellers, and information such as date of birth and occupation wouldn’t be required.
He later said the information wouldn’t only be required from buyers and sellers, but also from anyone who contributed money to a deal as part of the receipt of funds record, contradicting Weir’s belief that Ottawa had backed down on that provision.
Negotiations on the rules were handled by the federal Finance Department and not FINTRAC, Lamey said.
Canada’s housing market cools
Resale price growth lowest in seven years
The Canadian real estate market is being flooded with homes, causing prices to start falling in some key markets, according to the Canadian Real Estate Association. The average price of a home sold last month in the country’s top 25 markets was $337,071, an all-time record. But that record price was only up 1.1% from May, 2007 — the smallest year-over-year increase in seven years.
“The record number of new listings means more opportunities for buyers,” said Gregory Klump. chief economist with CREA. “The resale housing market has evolved in just a few short months.”
CREA said there were 67,628 new units on the market in May, a 7% jump from last year. It was the second straight month that a record number of houses has gone on sale.
The impact on prices is being felt most keenly in Alberta. The average price of a home sold in Calgary last month was $418,881, a 2.4% drop from a year ago. Edmonton sale prices averaged out at $340,499, down 4.8% from a year ago.
Unit sales in both Alberta cities are also plummeting. Calgary homes sales were off 34.2% from a year ago while Edmonton sales were down 34.8% during the same period.
The home sales are dropping across the country. CREA said on a national basis sales were off 16.9% in May from a year earlier.
Toronto Commercial Real Estate
More than 700,000 Square Feet Leased In May
Toronto Real Estate Board Commercial Members reported 717,361 square feet of leased space through the TorontoMLS system in May, Commercial Council Chair Garry Lander announced today. This figure is down 27 per cent from the 990,715 square feet recorded in May of 2007. “Thus far in 2008 there has been more than four million square feet of space traded through the MLS® system,” Mr. Lander said.
Prices for leased industrial space (all size categories) averaged $6.08 sfn in May, down one per cent from the figure of $6.14 sfn recorded during May of 2007. Prices for commercial space in all size categories averaged $14.43 sfn, a nine per cent decline from last May.
Sales Market Highlights
Toronto Real Estate Board Commercial Members reported 60 sales of Industrial/Commercial properties in May of 2008. Of these, 36 were Industrial properties of all size categories, which sold for an a average of $95.93 per square foot. This compares to a figure of $100.29 per square foot from non-MLS® sources, due to the sale of a number of unusually expensive industrial buildings last month.
See full Toronto Real Estate Commercial report »
Ontario housing starts down
Developers are seeing fewer people at their model homes and the Ontario Home Builders’ Association said yesterday that the province’s uncertain economic prospects are likely to blame. “The general economic slowdown and declining consumer confidence in Ontario is starting to be felt by home builders, who are reporting slower traffic,” OHBA president Mark Basciano said yesterday. “If consumers aren’t confident about their jobs or their investments they aren’t likely to be looking to purchase a new home.”
While Canadian housing starts were up by 3.5 per cent nationally to a seasonally adjusted and annualized 221,300 units, Ontario was the lone province that saw a decline in May, according to figures released by the Canada Mortgage and Housing Corp. yesterday.
Starts slipped by 7.4 per cent to a seasonally adjusted 67,600 units.
“A slowing economy, rising mortgage carrying costs and more balanced resale markets will dampen the pace of new home construction through 2008,” CMHC economist Ted Tsiakopoulos said.
In the Toronto area, which accounts for more than half the provincial total, starts were down 3.3 per cent to 36,800 units. The downswing was mostly due to a decline in the more expensive single detached home starts, the CMHC said. “Rising house prices continue to shift demand away from single detached homes towards less expensive condominum apartments,” said CMHC senior market analyst Dana Senagama.
Thanks to record sales of condominiums in 2007, housing starts are still up by 33 per cent on an unadjusted year-to-date basis in the Toronto area.
A solid gain of 24 per cent for building permits in the Toronto area for April attributable to condominium sales should also ensure starts for highrise buildings remain strong this year.
“A backlog of apartment sales commencing construction will keep starts elevated this year,” said Tsiakopoulos. But those numbers are being tempered by a slowdown in the detached home segment – which most buyers have traditionally preferred.
Last year, for the first time, condominiums edged out houses for a greater than 50 per cent share of the Toronto new home market.
Builders don’t sound worried about housing starts for this year, which are cruising on momentum from 2007. But the outlook for next year appears less certain.
“We are cautiously optimistic for the remainder of 2008, however 2009 and 2010 will be a concern for home builders if the overall provincial economy doesn’t show signs of improvement,” Basciano said.
Toronto home sales in decline
Tough economic times and dwindling affordability hit Toronto market
Warmer weather is failing to heat up the Toronto area housing market as it was hit with the fifth consecutive month of declining year over year sales since the start of the year. Existing-home sales in May plunged 16 per cent to 9,411, compared with 11,146 a year earlier, according to figures released yesterday by the Toronto Real Estate Board.
Many analysts had expected pent-up demand left over from the spring market, when buyers were hampered by slush and snow. But April and May have not brought encouragement to realtors.
“With economic uncertainty, people become more cautious,” said Pascal Gauthier, an economist with TD Bank Financial Group.
Manufacturing has been hit hard in Ontario, with General Motors announcing this week that the Oshawa truck plant will close next year. The planned move was just one in a string of bad news announcements that have damaged consumer confidence.
Sales are also down because potential owners are being priced out of the market, Gauthier said.
“Affordability has also been a big issue in the Toronto market, especially when you have a situation where house prices start to outpace incomes,” said Gauthier.
One-third of households in Toronto spent 30 per cent or more of their incomes on shelter in 2006, according to figures released yesterday by Statistics Canada. That was the highest figure of all urban areas in Canada. StatsCan also said the province as a whole had the highest shelter costs in Canada for both owners and renters.
“Affordability is the big factor crimping demand moving forward,” said Gauthier.
More people own their homes in Ontario than ever before, but the homeowners also have a lot more debt, according to the federal agency.
“Those who spend more than 30 per cent or more of their household income on shelter may do so by choice, or they may be at risk of experiencing problems related to housing affordability,” said Statistics Canada.
In Ontario, levels of home ownership are rising dramatically, helped by the low-interest-rate environment of the past decade.
Seventy-one per cent of households own their own homes, up significantly from 67.8 per cent five years earlier.
The proportion of households with mortgages also jumped in that time frame, to 59.1 per cent from 57.9 per cent.
The latest figure was the highest since 1981, when a flood of baby boomers was entering the housing market.
“With the aging population … the percentage of households with mortgages could be expected to decline and the percentage that are mortgage-free could be expected to rise,” StatsCan said.
“Instead the reverse occurred.”
This could be because of a large portion of renters moving into home ownership, but also because people are more willing to take on debt for such things as financing renovations or other big purchases.
Canada had $833 billion in outstanding mortgage debt as of February of this year.
Placing some downward pressure on prices in the Toronto market is more inventory in the form of new listings, which rose a significant 15 per cent in May.
Economist Gauthier, however, cautioned that the overall weak numbers for the Toronto market may look bleaker than the reality because sales are coming off the record highs of 2007.
“Depending on how well the economy does, there is a risk that it would unwind in a disorderly fashion. But what you are seeing right now is a cooling. It’s not coming off the tracks.”
Prices are still appreciating because sales still remain at historically lofty levels, even though they’re not now as high as they have been. The average price in May was $398,148, up a moderate 4 per cent from May of 2007.
The Toronto Real Estate Board said it is continuing to monitor sales declines in the city of Toronto after a controversial land transfer tax was implemented this year, adding further to the cost of buying a home.
The number of sales was down 19 per cent in May, compared with 13 per cent in the 905 region, the board said.
“The Toronto land transfer tax has been in effect for four months, and the decline in sales has been running for the same time period,” said board president Maureen O’Neill.